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2017 (9) TMI 1595 - AT - Income TaxNature of expenditure - whether the expenditure on ESOP is allowable or not? - Held that:- This issue was decided in favour of assessee-company by the Special Bench of Bangalore Tribunal in the case of M/s. Biocon Ltd. [2013 (8) TMI 629 - ITAT BANGALORE] as held that there is no difference between a case where the company issues shares to the public at market price and pays a part of the premium to the employees for their services and another where the shares are directly issued to employees at a reduced rate. In both situations, the employees stand compensated for their effort. By undertaking to issue shares at a discount, the company does not pay anything to its employees but incurs the obligation of issuing shares at a discounted price at a future date. This is nothing but "expenditure" u/s 37(1). - Decided in favour of assessee Disallowance of provision for standard and non-performing assets - Held that:- The issue in the present ground of appeal is squarely covered by the Hon'ble Apex Court in the case of Southern Technologies Ltd., Vs. JCIT [2010 (1) TMI 5 - SUPREME COURT OF INDIA] wherein it was held that the provision on non-performing assets and debited to P&L A/c in terms of the guidelines of the RBI governing the income recognition cannot be allowed to be deductible expenditure either u/s. 36(1)(vii) or (viia) and it was further held that the guidelines of RBI does not override the provisions of Income Tax Act, 1961. Also the Hon’ble Delhi High Court in the case of Housing & Urban Development Corporation Ltd. vs. Addl. CIT (2017 (7) TMI 144 - DELHI HIGH COURT) observed that based on guidelines issued by the Reserve Bank of India governing recognition of income, no deduction can be claimed. - Decided against assessee
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